NCLT-Approved Resolution Plan Binding on All and Arbitration Barred | SC

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  • Last Updated on 17 June, 2025

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Adani Power Supreme Court judgment 2025

Case Details: Adani Power Ltd. v. Shapoorji Pallonji And Co. (P.) Ltd. - [2025] 175 taxmann.com 413 (SC)

Judiciary and Counsel Details

  • Sanjiv Khanna & M.M. Sundresh, JJ.
  • Neeraj Kishan Kaul, Sr. Adv., Mahesh Agarwal, Arshit Anand, Himanshu Satija, Shivam Shukla, Advs. & E.C. Agrawala, AOR for the Appellant.
  • Shubhanshu Gupta, Adv. & P.V. Yogeswaran, AOR for the Respondent.

Facts of the Case

In the instant case, The Corporate debtor triggered the corporate insolvency resolution process (CIRP) by invoking section 10, which the NCLT admitted.

Before the initiation of CIRP, arbitration proceedings were pending between the respondent and the corporate debtor and said arbitration proceedings could not proceed further and were stayed after the imposition of a moratorium against the corporate debtor.

The RP invited claims from all the creditors of the corporate debtor. The respondent submitted its collated claim of the ongoing arbitrations amounting to Rs. 45.22 crores via e-mail before the RP. The resolution plan submitted by the appellant, SRA, was filed by RP before the NCLT sought approval, which was approved via order.

The respondent challenged the NCLT’s order, submitting that the RP did not inform him in writing about the rejection of his claim but instead simply put it on the corporate debtor’s website, and the RP had orally communicated the same to the appellant after the approval of the resolution plan.

The NCLAT, vide impugned order, upheld the approval of the resolution plan passed by NCLT and held that the resolution plan, as approved, was binding on all and could not be made subject to arbitration or any other proceeding. Thereafter, an appeal was made before the Supreme Court.

It was noted that there was no ambiguity in the observations and directions recorded by the NCLAT. Further, the claim of respondent no. 1, which had been categorised by RP as a ‘contingent liability’, could continue with arbitration proceedings for adjudication of its claim and quantification thereof, if they so wish and choose to do so.

Supreme Court Held

The Supreme Court held that the claim, even if allowed in favour of Respondent No. 1, would have no bearing on the rights and obligations of the appellant, which were in terms of the resolution plan. Therefore, the appellant could not be saddled with any liability except what was mentioned in the resolution plan.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied